Picking the Right Title for Your Assets

The way in which assets are titled can be vital. The main options are:

* Your own name. Holding assets this way is simple and inexpensive. However, if you become incompetent, those assets might be mismanaged. At your death, individually-owned assets may have to go through probate, which can be expensive and time-consuming.

* Joint tenants with right of survivorship. When one co-owner dies, all assets held this way automatically pass to the survivor. One joint owner can take over if the other is incapacitated and jointly-held assets don’t go through probate. A possible drawback is that these assets will go to your co-owner, no matter what it says in your will.

* Entity ownership. You might create a trust, a partnership (such as a family limited partnership), or a limited liability company (LLC) to hold assets. Such entities may provide protection from creditors and tax benefits. They can be expensive to set up and maintain, though.

Your best strategy might be to use a mix of outright, joint, and entity ownership. Use joint ownership if you’re sure you want your co-owner to inherit that asset. For incapacity protection, either place assets in a trust or give a trusted agent a durable power of attorney to handle assets held in your own name.